Paul Davids Writer and Trader

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Easy Forex Price Action Trading Strategy

This post and video is to go along with the Currency Strength Trading System HERE

Consider this if you will to be Part 2 of my tradings system. In part one I showed how to find strength in currencies.In Part 2. This is where I am going to show you how to trade the currency pair that you have chosen through the strength system.

My system for trading currencies is very simple. I don’t use indicators or bands or anything else. I use price action and S&R levels. Support and Resistance is the most important technique that I have found. I have tried indicator trading and either I was confused about what I was supposed to do or it simply didn’t work. I am not quite sure how I found Support and Resistance trading I just seemed to fall into it. I read a lot of books on trading both Forex and the stock market so I probably read it somewhere and it stuck in my mind.

Added together the currency strength system along with support and resistance gives me a high probability trading strategy. Just like my stock market earnings system I am using those four words again.

‘High Probably Trading Strategy’

Those four words have a slight disadvantage on other trading strategies because there aren’t usually that many setups per day. However I hate losing trades. I really do, it effects me psychologically so I try to find trades that have a small chance of failure. That is a good thing. If I have one or two winning trades per day then I am happy as a lamb. I am not someone that can watch their trading balance shoot up and down. No no no no! I have tried everything to not let it bother me but when I start to lose I perform badly to make it even worse. So I looked for a system that doesn’t lose very often and along with money management and how I compound my trades I don’t lose a lot of my balance when I do actually lose!

Good right?

The Setup

Using the currency strength system I have found that the GBP because of Brexit and the British Prime Minister losing his court battle is dropping after a high. Also using the same system I have noticed that the USD is strengthening. The GBP is going down and the USD is going up.

On the GBPUSD chart I have identified a level as you can see the red line is the resistance and the green line is the support. The red line is the top where I will place a Stop Loss the yellow line is my Entry and the green line is my Take Profit/Exit (well probably just above the green line)

Using orders rather than market entry is a lot less risky because if the price doesn’t reach the yellow line then you lose nothing! If however the price does trigger the entry the possibility is that it will carry on dropping to hit the TP. That is the beauty of entry orders!

As to not over complicate things the trade is a simple 1:1 trade meaning $1 risk for $1 reward. This is my minimum risk to reward allowed in my system. I will write a blog and make a video on my risk to reward and money management system in the future.

I am writing this blog totally blind and I will make a video to go along with this blog! Again I don’t know how this trade will turn out!

Thanks for reading.

The Earnings Trader

Paul Davids

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How To Trade Stock Market Earnings Reports! My Simple Trading System!

Again I am going to link the YouTube video in my Blog so people actually have to put in some effort.

The YouTube video for this post is HERE!

What are earnings reports?

Earnings reports are released by public companies every quarter included in the earnings report will be net income, earnings per share (EPS) earnings from operations and net sales. Basically how the company is doing overall. Are they making money or losing money, successful or not? That is simple enough right?

How to read an earnings report?

How do we know what is going to happen? Here is an example of an earnings announcement.

NOTE: Not the earnings report but an announcement of what the report is expected to be

According to Zacks Investment Research, based on 8 analysts’ forecasts, the consensus EPS forecast for the quarter is $19.21 The reported EPS for the same quarter last year was $19.01.

So according to the analysts the stock will go up because the Earnings Per Share is higher this year’s quarter than the previous year’s.

Simple right? Well yes and no. Yes, because that is usually what happens if the analysts’ are correct and no because if the earnings report under-performs or outperforms the analysts’ expectations then that will probably change the outcome. Got that so far? Good. Wait, wait don’t go and start buying or selling on what the earnings reports and the analysts have said there are a few more conditions to be met first.

So how do you use this to make a trading system?

There is the market itself to consider. Usually I am trading earnings reports from the NASDAQ so the NASDAQ itself should be going in the same direction. Or NYSE, LSE whichever exchange the stock is trading on. The stock should be going in the direction as the exchange.

The Three Rules!

The stock is trending up when the exchange is going up and in a downtrend when the exchange is also dropping. The trend must be ongoing for at least a week to be called a trend. If there is no trend for the week time period then look at the one month trend.
The report is also going in the same direction as the trend and the exchange. A positive report for an uptrend in the exchange and in the stock. And the opposite if the earnings are negative, a down market on the exchange and a downtrend in the stock. To put it simply all three are going in the same direction. If they are not all in the same direction then it is a NO TRADE!
Pre-market trading agrees with the report. Green for a positive report and red for a negative report. If the Pre-market is jumping around and going from positive to negative etc then it is a NO TRADE! After hours trading in the same direction is an advantage but not essential.

If all three of these conditions are met then there is a high probability of a successful trade! Understandably you are not going to get many trades using this system during normal times maybe one or two decent trades per week but that is usually enough but sometimes there will be zero. During the earnings report seasons expect a trade almost every day! These times are March, June, September and December. There are earnings reports in all months though so keep an eye out. This trading system is just another tool to use in your arsenal. Rule one can be relaxed if the other two rules are met but this decreases the probability of the trade. I have found that rule 2 and 3 are essential for success!

Thanks for reading!

The Earnings Trader

Paul Davids

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What kind of trader am I?

There are many types of traders but we all have a few things in common. When people ask me what kind of trader are you? I always have to think about it. Am I a day trader? An intraday trader? A momentum trader? A technical trader? A fundamental trader? A market order trader?

I know I am not a scalper or a high frequency trader. That is way too much stress and pressure. But neither am I a long term trader. I am going to break down the major trading types. Yes, there are many subcategories and I am sure I will miss quite a few.

The Long Term Trader

This really is the tortoise in the tortoise and the hare. The long term trader looks at usually medium to huge cap fundamentally sound companies that have a decent dividend and growth over the long term. Actually choosing high volatility stocks goes against profits in this case. Stocks that are slow and steady (The Tortoise) are the ones to go for. A long term trader is looking at weeks, months and years of growth. He doesn’t concentrate on the short term and the newest fads in the industry the long term trader is buying blue chip stocks. This trader owns stocks like MacDonald’s and Coca Cola. He is obsessed by Beta, P/E and dividend rates. Undervalued could be his whole trading strategy or high dividend returns. There is no point talking to him about your fast scalp done on the newest IPO because he will just nod his head and smile at your simple delight in the game.

The Scalper

A scalp trader will see a buy trade execute the trade get out for a small profit then he will see a sell trade on the same company and again get in and get out. Quick small profits for short amounts of time. Or quick bursts of speed if you prefer. Like the Hare. Unlike the hare in the story though, a scalping kind of trader can get ahead and win. This strategy is not for the faint hearted and a lot of people seem to think it is easy. Until they start losing money that is.

The high frequency trader is very similar to the scalper they make lots of little trades to make a profit of one big trade.

Momentum Traders

Momentum traders seek stocks that are moving quickly in one direction in high volume. Then these traders swoop in like a bird of prey and grab their profits. Often called trend traders. These traders hover over the charts waiting for significant moves in a certain direction. More technical expertise is needed than fundamental. Technical trading is watching the movements of charts, candles and looking for patterns such as double tops or kangaroo tail candles.

If you think of the momentum traders and the technical traders as birds of prey swooping in for the kill.

Technical Traders

Technical traders focus on charts and graphs. They analyze candles on charts for strength, convergence and divergence that might indicate buy or sell signals. They also like the momentum trader look for candle stick patterns that may signal a trade. Naked trading is becoming more and more popular. Naked trading is a technical trading strategy that uses zero signals on the charts, no bands or RSI etc.

Fundamental Traders

Fundamentalists trade companies based on fundamentals which examines corporate events, particularly actual or anticipated earnings reports, stock splits, reorganizations, or acquisitions. A fundamental trader will check the news, how well the company is doing, earnings quarters, growth Earnings Per Share (EPS) among other things to see how healthy or unhealthy a company is. The fundamental trader will cull the weak companies and only let the strong and healthy survive.

Both fundamental traders and technical traders can trade over both short or long time frames. A strategy for fundamental traders is the short sell. By using the wolf tactic they find a weak company that has news coming for example a company that hasn’t been doing very well and also has an earning report out. The fundamental trader will short that company for a day trade maybe taking profit anywhere between 10 minutes to two hours.

A technical trader may do the same trade but she will be using the charts and candle sticks to wait until the right setup comes along. It’s the same trade just a different way of looking at it.

A technical trader may buy a stock such as Starbucks simply because the stock has been going up for a long time, the chart then goes drops. The technical trader spots a reversal pattern meaning the the stock will carry on with the uptrend. He or she will see this as an opportunity to get in and make some money with the continued uptrend of the stock. The fundamental trader may know that a temporary problem with supply from an importer has made the stop drop so he will buy the stock as soon as the news is released that the supply problem has been solved. Again same result different analysis.

So what kind of trader am I?

I am a fundamental earnings report intraday trader that also uses charts and momentum to understand when I should be buying a stock or shorting a stock. My trades last anywhere between 5 minutes and two days.

Thanks for reading

Paul Davids

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Last Week’s Trades. 12-16 August 2019

Last week I followed my trading strategy to the letter and I was very successful even with a couple of false starts with the volume of the trades.

I have a simple trading strategy that I use almost every day. It is a very easy system even for someone that doesn’t have a lot of experience in the markets. In the guide is a little jargon and some technical words but nothing that Google won’t solve for you.

I have to say that last week was pretty amazing and my laziest week by far I only traded 8 times. As you can see from the results it worked 6 out of 8 times! That is a great result but obviously I don’t always get such a win rate but I am defiantly going to trade less frequently next week to see if I can reproduce the results. With the correct use of risk and reward even if I am right just half of the time I can still make a decent profit from the system.

And this is the whole point really of the risk and reward aspect. It doesn’t matter how great your trading system is, if you don’t use correct risk and reward then you will more than likely lose money in the markets. Your risk and reward doesn’t have to be as strict as it would have to be with Forex or commodities but it defiantly should be at least 1/1.5 meaning you are risking $1 dollar to make $1.5.

There are many ways to achieve what you want in trading but don’t go jumping in before you are ready.

First get a system
Second practice that system
Third learn how to manage your risk and reward
Forth manage your emotions.

Of course I would recommend my own system as I wrote it and I know it works. Yes, I make a little profit on it but it also took time to write and format into something that nearly anyone could read then use.

Thanks for reading

Paul Davids

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Week 1

Possible Trade Set ups for Monday the 19th of August 2019

                                     Just because it is the weekend doesn't mean that a trader's work is done!

Monday19th August 2019  
 
Buy Estee Lauder Companies, Inc (EL) 
Sell Weibo Corporation (WB)

Remember not to follow these trade setups blindly I am in no way responsible for any losses that my occur.

Tips for trading.

You should never follow setups without knowing what you are doing. It doesn’t matter who gave you the setup. Remember it’s your money! Who else but you is going to care about your money? I am always both surprised and shocked at people on forums and trading sites when they are asking what they should buy or sell. Why are you investing or trading in the stock market when you don’t know what to do?

I practiced my trading system on a paper trading account for three months, during that time I made a lot of changes to make a simple trading plan that I could easily use whenever I wanted. Because of this experience of practice trading I knew exactly what I had to do on a live account I know when to enter the trade and when to exit the trade. And believe it or not more importantly when not to take a trade.

If you find a trading system/plan that you are interested in, then PRACTICE that trading system for a least two months. If you can be profitable trading on a practice account then you can be profitable trading on a live account. I know you want to make money right now but right now means you will lose money!

I will keep the trades updated on Monday if I entered or not. Where I entered, where I placed the Stop Loss and Take Profit and how much I took or lost from the trade. Yes, if I lose I will still post the result because trading is about the long run and what can be learned from the losses.

Thanks for reading my Blog. 
Paul Davids

Forex Trading Medium Risk Medium Reward Money Management System

https://youtu.be/CIA8LlJgPdA

Why have low risk and low reward? Or high risk and high reward? Why can’t we as traders just moderate the risk to reward? Wouldn’t that make more sense?

I have read and heard traders say you shouldn’t risk more than 1% of your money on any one trade. I am sure you have also heard this many times, too. But that isn’t very realistic for retail traders with smaller accounts and what happens time and time again is those traders get frustrated trading 1% and then blow their accounts. And to be honest a lot of traders are on what experts would call micro accounts and that is fine. The whole you need XXXX amount of money to trade is now dead in the internet world. You can open an account with a dollar! And some platforms you can even trade with that dollar! I know that is a ridiculous account but it is only an example.

What is a micro account?

I would say a micro account is any account with a balance below $500 with between $100 and $300 being the most common. Let’s be honest a lot of newer traders don’t have mountains of money available to trade and some traders are not comfortable trading with large amounts of capital which is fine. Let me say that again. It is fine! If you can’t make money with 500 you won’t be able to make money with 50,000! Even if you have a lot of money available I would recommend you trade on a smaller account after you have finished your demo trading before moving on to a large account.

Medium Risk?

So what do I mean by medium risk and medium reward? Putting it simply it is using 4-5% of your account per trade rather than just 1% meaning it is medium risk rather than a high risk at 10%+

If you add a x1.5 profit ratio to this then you are increasing your reward while decreasing your risk. 1.5 simply means you risk $1 for the return of $1.50 or more. If the trade will not give you back at least 1.5 to 1 on your money then you don’t take it. So if you have a 50/50 system meaning you profit 50% of the time and you lose 50% of the time you will still make money.

Five losses at $1 = minus $5

Five profits at $1.50 = $7.50

OK?

When you are increasing the amount of percentage you are increasing your ammunition in the trade, you are making a bigger bang so to speak.

For example:

Balance: $500

1% per trade=$5

Profit at x1.5=$7.50

Now if we use the same rule of profit but increase the percentage to 5%

Risk $25

But your reward is $37.50

Now I know that no trading system is perfect and you are going to have losing trades. But if you have 20 losing trades in a row then there is something wrong with either your system or you. If you have a system that is only giving you a 50/50 split which to be honest is a pretty rubbish system then you need to increase your requirement on your take profit to 1:2 meaning you are risking $1 for a $2 dollar reward!

Risk: $25

Reward: $50

Being Consistent!

Now the next part is important! If you are going to use this system then you must use the same amount of risk every time. If you use higher risk sometimes and lower risk other times then you are counting on luck on which trade will go your way.

First trade: 1% risk

Winning trade!! $10

Second trade: 5% risk

Losing trade! Minus $25

Minus $15

We don’t rely on luck we rely on the percentages and using our edge with the trading system. And like with your trading system your money management system also has to be consistent.

Let me show you a trade. This is a trade on XTB it is only a small account because I haven’t traded with XTB on a real account before so I have $355 in there. I started with $290.

So this is a trade I am putting on the GBP/USD as you can see it is an order not a market entry.

Risk is $15.76 which is around 5% give or take a little is fine but I try to keep it under the 5% but 5.2% would be just fine.

My Take Profit is $47.30 which is just over the 1:3 ratio

Trading Scams!

https://youtu.be/NOdkRsnq3Cc

A few things have been bugging me recently especially on YouTube I have been seeing a lot of advertisements on YouTube trader’s videos for things like signals and paid stock screeners and even links to courses that the person that is making the video isn’t even a part of.

I want to tell you these things are pretty much scams. They are paid advertisements that the maker of the video is putting on his/her page to make advertising revenue off of you!

Scam number ONE. Trading signals the biggest problem I have with paying for signals apart from the fact they are a rip off. Is they make you dependent on them. You don’t learn. If you can afford signals then you can afford to pay a decent manager to trade your money for you. If you can’t afford signals and you are listening to people on the internet where to put your money then to be blunt and to the point you deserve to lose it! Would you trust a guy on the internet with your medical diagnosis? Or would you go to a doctor? Again if you say ‘Yes’ to the question then you deserve what you get, because you are an idiot.

Copy trading is pretty much the same. If you don’t know how to trade then guess what? You shouldn’t be trading. You may think that this is just an opinion but it is more than that. I know nobody and I mean nobody that has made money in the long term trading signals or copying other people. NOBODY!

I know people that paid a lot of money for signals that sometimes work and sometimes don’t.

Of course my own trading sometimes works and sometimes doesn’t but I know why it didn’t work and I have a system in place to limit my risk. Most people using other people’s signals or following these alerts have NO IDEA about trading NONE! So they have no idea about risk management or account management!

Trading courses.

There are so many right? Would it surprise you to know that a greater majority of those courses don’t work? And an even bigger majority of those Youtube traders that have the course in their video or in the description, either don’t have anything to do with the course or B have no idea about trading in the first place.

Not all of the Youtubers obviously and I won’t name names even though I watched a Youtuber live streaming yesterday when the stock was dropping and he had no idea why it was doing that and trying to blame market conditions because of this or that. LIVE!! Well I didn’t trade the stock because at the time the news release wasn’t clear on what the stock was going to do. The news was pretty good but the NASDAQ was down and there were other factors with the news report that made that good report into a neutral report. Add the market jumping around and you have an un-tradable stock. The stock did go up some at the beginning of the trade but Mr Greedy didn’t close it and take a small profit because he wanted to show his watchers how amazing he was. Fail. And by the way the stock finished the day at over 1% in the green. Another fail.

If you don’t know the basic fundamentals of a stock then why are you live streaming and telling over 2,000 people how to trade it? I am sure those new traders that are trading with a hundred dollars or so are so pleased they lost their money on your sure thing and using words that most in the comments didn’t even understand. Well done! IDIOT!

If a Youtuber is showing how they are making money but not how they did it or just talking around the subject then advertising some kind of course. Guess what? Most probably the course is junk and you are paying them for nothing. You know the videos I mean. They spend ten minutes telling you about the secret to trading success but actually didn’t tell you anything at all except there is a secret. There is a link to the course in their description. Again it’s total rubbish.

Number three

Paying for stuff that is already free.

This is usually one of three things.

Charting software. Guys you don’t need the super pro charting software. In fact nobody does. If your charts on your broker’s platform are not enough consider moving broker.

Related to charting software. Paid for indicators are a total and utter waste of money. They usually don’t work and if they do work there is a free version out there and the one you paid for is just repackaged using a different graphic. This is how they get you to buy the charting software because the software has amazing indicators that can be found no where else but from this charting company that you don’t actually need. The Youtuber will have a video of them making trades using this wonder indicator. Again total and utter junk. If you want to throw your money away bet on the horses at least you have a chance of winning something.

Last one and one that really gets on my nerves and I see it a lot on Youtube. Paid stock screeners.

Why would you pay for a screener? Yahoo! Finance has one for free that pretty much does everything you want. And Yahoo! Isn’t even the only one. There are a few out there that are totally free. Don’t pay for free services. Again if the course says you need this screener because it has a setting that the other screeners don’t have for the course to work then 99% of the time that course is a SCAM!

Thanks for reading

Paul Davids

Daniel Negreanu’s Greatest Moments

Simply because Kid Poker is my favourite all time player

@Realmanshow

This guy is freaking amazing. His ability to read people makes him a threat at any poker table. Plus he is a very personable guy, and I’m sure he is a pleasure to be around.

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Can you save money?

Many people have problems saving money. There are many reasons that someone can not save money. But here are some of the most common. A lack of knowledge, lack of control or simply not having enough money in the first place! Some people and I have friends that really don’t think about tomorrow and they live paycheck to paycheck. Or even social check to social check!

Lack of knowledge is easily solved!

When I was younger, OK when I was a lot younger (my wife just gave me a funny look when she read that)

When I was young I had a few problems with finances so I learned how to stretch out my money. As I got older and started working, I found that this stretching out of money that I experienced really helped me to save. And I became very good at budgeting.

Ah, budgeting nobody likes that word. One trick I did learn was to split up my money rather than having it all in one lump. $800 looks like a lot of money when it is bundled together in the ’20s but if you separate it, then not so much. I did have a job in college, in fact, I had two jobs. I worked tables and in a kitchen in a pizza place during term time and I worked in a factory that made meat pies and savoury foods in the summer holidays. I am British and in fact, it was pounds but I am using dollars for ease here.

This is how I separated my money.

1. rent ($400)

2. utilities ($70 some were covered in the rent)

3. food ($100)

4. transportation ($70) I had to travel to college as places near my school was too expensive.

5. everyday spending, soap, deodorant, socks things like that. ($50)

6. Other ($30) You know other, friends want to go for pizza or to the cinema etc

7. savings ($80)

Wait? What? I hear you say. You only had $800 but you were saving?

YES! $80 which was a huge 10% of my money but at Christmas, I could go home and have a little cash left over. That was a huge deal for me as my college was pretty far from my home. When I was home during the summer all I did was work to earn extra money for the following term so Christmas was my saviour.

Although things are more expensive now, it is easier to save.

For example, energy-saving light bulbs and LED lights are much cheaper than they were when I was a student. In fact, energy-saving bulbs were about 10 bucks a pop! Which back then was very very expensive, seeing as a traditional bulb was around a dollar! Also, a lot of electronics are more energy-efficient and can be charged by USB.

There are many ways you can save by using the internet and your phone you can get some really good discounts. There are phone Apps to help you save and to shop, get coupons and even free stuff. Comparison websites are a blessing for those on a budget. The only thing I remember helping me get a discount was my student ID!

If none of those things is working for you then you need to look at your spending habits. Did you have to eat the Chinese take-out Couldn’t you have spent that $10+ on buying enough food for two meals in a supermarket? Did you have to eat tacos or pizza etc?

Sometimes I can tell the difference between the label foods and the supermarket version but not always and if I am hungry I don’t seem to care as much. And even if you can tell, if you can’t afford to buy lunch because you are spending the extra dollar on something stupid like branded cereal then you aren’t doing things right. It isn’t forever! You will get money in the end. Maybe that dollar you saved on cereal is the dollar to make you more in the future.

Talking about brands. Do we really need them? I am sure you can do without your Starbucks frappuccino or whatever. Are you a runner? No? Again do you really need the latest Adidas or Nike’s for sitting around your room in? Materialism makes you feel poor because you can’t afford the things you don’t really need.

Think! You buy expensive things to show that you can afford expensive things. So buying expensive brands when you can’t actually afford them is just STUPID! It’s like that guy, you know the one he has a BMW but lives with his parents because he can’t afford to move out because the car payments take most of his salary. He has a BMW but is broke!

I have always thought this way. I never understood my friends wanting this and that when they didn’t have rent money but were buying Levi’s at over $200 for a pair because whichever celebrity was wearing them at the time. Did that make me weird? Maybe but I didn’t struggle for rent or to eat. How good are your nice jeans, now that you haven’t eaten all day? I guess the other advantage is they were staying thin so they could still fit in those jeans.

You don’t have to live like one of those crazy YouTube people that reuse their bath water to flush the toilet or cut up plastic bags to make clothes from. But with a bit of thought and looking at what you can possibly do without, you can save money for that Starbucks at the end of the month or those new shoes that you like. I managed to save $80 a month on a budget. That money got me home for Christmas and allowed me to buy some presents for my family.

Thanks for reading

Paul Davids

Review Of IQ Option Broker

IQ Option is mainly a Binary Options platform. BUT don’t let that put you off. They do have CFD stocks and Forex as well as Ctypto if you are living in the right country. Unfortunately for me living in China I am blocked from trading that instrument.

IQ option has some pretty good tools including a Earnings News area which is really useful for me and a news feature that prints on your charts so you can see any news that is coming out on the instrument you are trading.

The stocks they offer are a little limited being mostly the top 500 companies along with some top level European stocks such as Barclays and Ferrari. I haven’t gotten to the selling point of this platform, yet. So don’t think that this is a sales pitch even though I am using an affiliate link to the site.

One of the best things about this Broker is the fact that it is not only easy to get verified. Passport/driver’s license and proof of address is electronically scanned and accepted. It is really easy to both deposit (minimum of $1) and easy withdraw(but some countries have a pretty high minimum amount for withdrawal). I could do it here in China using Weichat QR scan and use Weipay although my withdrawal is through wire transfer and a minimum of $1000. Other’s have found it easier with less for the withdrawal. They didn’t seem to mind me topping up to over $1000 and then withdrawing which is how I got out $400

Binary Options

OK let’s talk about the elephant in the room. Binary options! Some of you may be aware that there was quite the scandal a few years ago with binary options and people being scammed for all of their money. Mainly scammers offering to trade binary options for others then running, as well as a lot of scam brokers that were also in on the whole deal. It was pretty messy and ruined the reputation of binary options

However IQ Option survived all of that because they are a legitimate broker. Binary Options are a risky instrument and I would advise you if you are going to trade them then only trade Forex Binaries and Stock Binaries during weekday trading hours and use very strict money management and risk management. If you trade them after hours and on weekends you are not trading you are betting (gambling) Don’t gamble with your money, people.

If you find it hard to resist trading on the weekends then this broker is not for you. If you have a gambling problem or an addictive personality then again this broker is not for you. A binary option you are using a call(buy) position or a put(sell) position on whether the instrument is going to go up or down within a certain amount of time.

On IQ Option that can be anywhere between a few seconds, minutes to a few weeks or months (the more traditional options trading system) Again I would advise if you don’t know what you are doing then don’t do it.

Practice makes perfect.

One great thing about this broker is the unlimited demo. You can sign up for just the demo and switch to a real account any time you want. You can also switch back to the demo account if things are going wrong for you in real trading so you can practice again. If anyone has been following me then you know that I always advocate practicing as much as possible.

Over all I think IQ Option is a pretty decent broker for the more inexperienced trader. The platform itself in all of its forms, the desktop version, mobile and the online version are very easy to get to grips with and learn for a pretty much novice trader. That Demo feature is a huge bonus for the site as you can practice and make sure you know exactly how to use the tools, before you put down real money.

Thanks for reading

Paul Davids

Ethereum Online Miner

This is quite an easy one, sign up, connect your wallet and allow it to run in the background through your browser. It also has an affiliate option to make 20% off of your direct affiliates which is pretty good.

Compounding With Compound Interest!

This is a work in progress extract from an upcoming guide I am writing. The pictures are not in the guide they are free clipart and images from the internet. This is just one rough chapter in the guide. I haven’t as of yet edited it or let anyone else see it.

What is compound interest?

Do you know the story of a Raj in India that was obsessed with playing chess? One day a traveler appeared at the palace and the Raj in typical style challenged the man to a chess game. The Ran offered a reward to the man if he won the chess game. The man being a very clever and intelligent person modestly asked for a grain of rice to be doubled on each chess square. The Raj didn’t see any problem in this as rice was cheap and plentiful. He played the man and lost and being a honest person he paid the traveler in rice in the way they had agreed. So first the Raj put on one grain of rice then two, then, four, eight,sixteen, thirty-two, sixty=four and so on until he realized that he wouldn’t be able to pay his debt.

The total cost of rice would eventually come to 210 billion tons. This is compound interest!

How does this example help us as traders? It is fairly easy although we aren’t going to double our money every day. We can use compounding in a way to significantly increase our profits while at the same time significantly decreasing our risk. Using compound interest is all about patience.

I will give a quick example: $250 starting money.

2% a day for 250 days. Now I know this is unrealistic because sometimes you are going to have losing trades or there are going to be no trade setups for your system. So lets say 200 days including loses and no trade days. That is rounded up to $12,000 averaging 2% per day. I know it’s actually just over 13k but I am adding extra losses or days that nothing is happening or you were sick etc etc

The profits are tiny at first and here is where the patience comes in.

The first day you will make just $5!

Day ten it is $54.78 profit

Day twenty $121.49

After the quarter that is $923.47 dollars in one quarter! And that is being pretty conservative with your $250.

An example trade would be: $100 trade with a 5% target at 5:1 leverage.

Overall profit is 2% on $250.

Tomorrow your trade is $105. This is just an example! A very good friend of mine traded $50 on a $500 account and built that $50 to over $1500 without ever going into the other $450. He has since made over 40k trading just by being careful.

Compound Interest Grow Investment Clocks Flying 3d Illustration

Obviously you will make more profit some days and less other days, depending on your set ups, leverage etc. But let’s say you are trading with leverage and you only need 2% profit for the day, you can now decrease how much money you are risking because you only need 2% rather than trying for that 15% of course you can still do that by risking a smaller part of your account and using leverage and leaving the rest of your money in the account as your margin in case something does actually go wrong. (my preferred way of doing things)

You can also lower your leverage and use a larger part of your account get the 2% and then get out. I have tried this method but I still flinch at the fact that a large part of my account is in the trade even though I am technically risking the same amount.

Again because the gains seem kind of small at first, many people lose patience and start gambling larger amounts of their account on higher leverage because they want to get there today! If I can make 15% per day then I can get there in jut 6 weeks! WOW another 6 weeks and I can have nearly a million!!!

If you think it’s that easy you have another thing coming. Sure you will make your 15% but you will lose just as much if not more when it goes wrong. Slow and steady works much better than fast and crazy.

Thanks for reading. Like I said it is a work in progress!

Paul Davids

What To Do When You Lose?

Update from yesterday. I didn’t pay attention to the pre-market price on the TIF trade. I was working but that isn’t an excuse I saw that it was going up at one point pre-market then finished the stock down. So I traded the down as a sell and unfortunately I lost.

Now I want to explain something about trading systems. My trading system says that a stock must not change direction pre-market. I didn’t follow my trading system and worse COTY I ignored and COTY went the way that the indicators said it was going to go. YIKES! HUGE MISTAKE!

It gets worse actually. There is something called SLIPPAGE meaning that the broker’s platform doesn’t close your trade on time. Yep, you guessed it!

From the broker ” We have checked your case with our technical department and found that your Sell position ID 485692440 for Tiffany & Co closed on 28/08/19 at 13:31:54 GMT due to Stop Loss rate being triggered at the rate of 83.0700.
Your stop loss rate (82.6600) was not traded in the market and caught the next available rate (83.0700), which was beyond the stop loss that you set. “

No big deal right? Well, when you add in leverage that number… Ok never mind.

Some Brokers guarantee your stop and have a low slippage policy. And some Brokers don’t. Make sure you know which policy your broker uses.

From the broker “Stop Loss (SL) and Take Profit (TP) orders are not guaranteed and over volatile periods where spikes, gaps and slippage can occur due to market conditions, if your requested SL or TP rate is not traded in the market, the close order will be triggered at the next available rate. Just as one would benefit from the trade closing beyond the set TP rate and we would not deduct money gained from the positive slippage, the same logic applies when a trade closes beyond the set SL.”

In no way is this the broker’s fault! That is policy.

Even though it seems the broker is making an excuse, the policy is there. It does suck when it happens and it seems to happen at the worst possible time for you. My wife was watching and now she is complaining that trading is so risky. Of course, it is risky but the reward outweighs the risk.

How do we make it less risky? By having a trading plan, sticking to the trading plan and not ignoring things in the trading plan for whatever reason. If I had paid attention to the fact that Tiffany went up during pre-market I would have traded COTY and made a profit rather than a loss. Why did I do that? Who knows? So the lesson here is when you lose, you lost for a reason. You lost because you didn’t do something you should have done. It isn’t the broker’s fault, it isn’t the market’s fault.

IT IS YOUR FAULT! Fix the problem and move on! If you have a flaw in your system or in you as in you are not sticking to your trading plan then go back to a demo account. Real money is not the place to practice!

Thanks for reading.

Paul Davids

‘High Probably Trading Strategy’

The Setup

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How to read an earnings report?

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The Three Rules!

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The Scalper

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Technical Traders

Fundamental Traders

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Possible Trade Set ups for Monday the 19th of August 2019

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Medium Risk?

Being Consistent!

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Binary Options

Practice makes perfect.

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